2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

224 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)
*
G.R. No. 109991. May 22, 1995.

ELIAS C. QUIBAL AND ANTONIO U. DENIEGA, petitioners, vs.

THE HON. SANDIGANBAYAN (Second Division) and PEOPLE
OF THE PHILIPPINES, respondents.

Anti-Graft and Corrupt Practices Act; Elements of the crime

punishable by Sec. 3(e) of R.A. 3019.—Violation of Section 3 (e) of R.A.
3019 requires proof of the following facts, viz: 1. The accused is a public
officer discharging administrative or official functions or private persons
charged in conspiracy with them; 2. The public officer committed the
prohibited act during the performance of his official duty or in relation to his
public position; 3. The public officer acted with manifest partiality, evident
bad faith or gross, inexcusable negligence; and 4. His

_______________

* SECOND DIVISION.

225

VOL. 244, MAY 22, 1995 225

Quibal vs. Sandiganbayan (Second Division)

action caused undue injury to the Government or any private party, or gave
any party any unwarranted benefit, advantage or preference to such parties.
Same; Same; When the public officials disregarded the provisions of
contracts tying up payments in accordance with the percentage of work
accomplished, or failed to enforce the penalty clause providing for
liquidated damages for delay in the accomplishment of the work, they acted
with manifest partiality and evident bad faith.—The construction of the
municipal market should have been finished on March 7, 1988. At the time
of the audit on August 31, 1988, however, only 36.24% of the construction
of the market has been completed. Yet, out of the contract price of
www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 1/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

P652,562.60, petitioners already paid the contractor a total of P650,000.00.

In so doing, petitioners disregarded the provision in the contract that
payment should be based on the percentage of work accomplishment.
Moreover, the contract provided that in case of delay in the completion of
the project, the contractor shall be liable for liquidated damages at the rate
of 1/10 of 1% of the contract price per day of delay. Petitioners did not
impose this provision against the contractor. By their acts, petitioners clearly
acted with manifest partiality and evident bad faith relative to the
construction of the municipal market.
Same; Same; Words and Phrases; “Gross Negligence,” Defined; In
cases involving public officials, there is gross negligence when a breach of
duty is flagrant and palpable.—Petitioners’ acts and omissions are, to say
the least, grossly negligent. Gross negligence is the pursuit of a course of
conduct which would naturally and reasonably result in injury. It is an utter
disregard of or conscious indifference to consequences. In cases involving
public officials, there is gross negligence when a breach of duty is flagrant
and palpable.
Same; Same; An unnecessary delay of almost two years in the
construction of a public market caused considerable monetary loss in the
form of monthly rentals, causing damage or injury to the municipal
government.—Petitioners also insist that no undue injury or damage was
caused to the municipal government considering the later completion of the
public market. We cannot share this myopic view. The construction of the
municipal market was completed only at the end of December 1989 when it
should have been finished by March 7, 1988. This unnecessary delay of
almost two (2) years caused considerable monetary loss to the municipal
government in the form of monthly rentals. The least that petitioners should
have done was to enforce the

226

226 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)

penalty clause of the contract (providing for payment of liquidated damages

in case of breach) when the contractor failed to meet his deadline on March
7, 1988. Instead of doing so, petitioners even made two (2) additional
payments to the contractor (on March 14 and April 22, 1988) in the total
sum of P250,000.00. Thus, it cannot be successfully argued that the acts and
omissions of petitioners did not cause damage or injury to the municipal
government.

PETITION for review of a decision of the Sandiganbayan (Second

Division).

The facts are stated in the opinion of the Court.

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 2/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

Hechanova, Ballicud, Potot for petitioners.

PUNO, J.:

Petitioners ELIAS C. QUIBAL and ANTONIO U. DENIEGA, the

mayor and treasurer, respectively, of the municipality of Palapag,
Northern Samar, and Eduardo C. Guevarra, a private individual,
were charged with violation of Section 3 (e) of Republic Act No.
3019, as amended, otherwise known as the Anti-Graft and Corrupt
Practices Act. 1
The Information against them reads:

“That on or about February 16, 1988, or sometime prior or subsequent

thereto, in Palapag, Northern Samar, within the jurisdiction of this
Honorable Court, the accused public officers, namely, ELIAS C. QUIBAL,
Municipal Mayor of Palapag, Northern Samar, and ANTONIO U.
DENIEGA, then Municipal Treasurer of Palapag, Northern Samar, while in
the discharge of their public functions, through evident bad faith and
manifest partiality in conspiracy with EDUARDO C. GUEVARRA, a
private contractor representing Floters Construction, did then and there
wilfully and unlawfully cause undue injury, by effecting payment in the
amount of P650,000.00, when the actual cost of the public market of
Palapag, Northern Samar, was only P301,754.65, thereby giving unto the
said private contractor unwarranted benefits to the damage and prejudice of
the government in the total amount of P348,345.35.”

_______________

1 Original Records, pp. 1-2.

227

VOL. 244, MAY 22, 1995 227

Quibal vs. Sandiganbayan (Second Division)

Only accused Elias C. Quibal and Antonio U. Deniega were

arrested, tried and convicted. Accused Eduardo C. Guevarra remains
at large.
The evidence on record established the following:
On November 27, 1987, the municipality of Palapag, Northern
Samar, represented
2
by its OIC vice-mayor Teodoro C. Bello, entered
into a contract with the Floters Construction Company, represented
by accused Eduardo C. Guevarra, for the construction of the
municipal public market. The period for the completion of the
project was one hundred (100) days. The price was P652,562.60.
From February 16, 1988 to April 12, 1988, accused Mayor
Quibal and Municipal Treasurer Deniega, issued four (4) PNB
checks in favor of the contractor in the total amount of P650,000.00.

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 3/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

However, sometime in June 1988, after receipt of said payments, the

contractor abandoned the project.
On August 31, 1988, a COA Special Audit Team composed of
Provincial Auditor Marissa Bayona and Engineers Bienvenido
Bayani and Robert Bajar inspected 3
the progress of the construction
of the Palapag municipal market. It discovered several irregularities.
It found out that only about 36.24% of the construction of the
municipal market has been completed despite the lapse of the
contract period of 100 days. The actual cost of the finished work on
the project was only P301,746.65. Unfinished work on the
municipal market, as evaluated, cost P348,235.35. It was also
established that the contractor had already been paid P650,000.00
despite the non-completion of the building. The vouchers
accompanying said payments were not properly filled-up and the
required supporting documents were not attached. The disbursement
vouchers (Exhibits “E” to “E-3”) submitted by municipal treasurer
Deniega to Provincial Auditor Bayona were unsigned. Likewise, the
payment to the contractor in the amount of

________________

2 Original Records, pp. 41-42.

3 Per Office Order No. 15-27, dated August 3, 1988, issued pursu-ant to the
resolution of the Sangguniang Bayan of Palapag, Northern Samar, to evaluate the
progress of the construction of the municipal market.

228

228 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)

P340,000.00 was not accompanied by any Certificate of Acceptance

issued by the COA. COA rules require such certificate of acceptance
if the disbursement
4
involves more than P200,000.00.
In a letter dated January 26, 1989, Provincial Auditor Marissa
Bayona submitted an inspection report to the COA Regional
Director recommending that appropriate legal action be taken
against the municipal mayor, treasurer and the contractor in
connection
5
with the construction of the Palapag public market. In a
letter dated April 7, 1989, the Ombudsman informed Mayor Quibal
of the charges filed against him by the COA. On May 12, 1989,
Mayor Quibal requested the COA Regional Director 6
for a reaudit of
the cost valuation of the said construction project. His request was
denied.
Sometime in November 1989, petitioners still continued the
construction of the municipal market using the stockpile of materials
previously purchased by the contractor and the contractor’s retention
fee. They completed the construction at the end of December 1989.
www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 4/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

The municipal government then started leasing the market stalls in

January 1990.
The two (2) accused public officers testified in their defense.
Accused Deniega, municipal treasurer, admitted that he disbursed
the total amount of P650,000.00 to the contractor, viz:

a) P340,000.00, released on February 16, 1988, based on the

voucher (Exhibit “F-3”) presented to him by the contractor,
which was duly approved by the mayor.
b) P60,000.00, released on February 26, 1988, based on the
voucher presented to him by the contractor (Exh. “F-2”);
c) P200,000.00, released on March 14, 1988, also based on a
voucher (Exh. “F”); and
d) P50,000.00, released on April 22, 1988 (Exh. “F-1”), also
based on a similar voucher.

But he claimed that he submitted complete and signed vouchers and

the required supporting documents to the Office of the Provincial
Auditor. He insisted that the unsigned vouchers pre-

_______________

4 Exhibit “H.”
5 Exhibit “13.”
6 Exhibit “10.”

229

VOL. 244, MAY 22, 1995 229

Quibal vs. Sandiganbayan (Second Division)

sented in court by the prosecution were not the vouchers which

supported the payments they made.
For his part, accused Mayor Quibal explained that he paid the
contractor more than his accomplished work to enable the latter to
immediately purchase construction materials which were then
selling at a low price. He further maintained that the audit team
should have included the value of these construction materials (still
unused at the time of audit) in its evaluation of the project. He urged
that these unused materials were worth approximately P348,235.35,
which would justify his payments to the contractor in the total
amount of P650,000.00.
After trial on the merits,
7
the Sandiganbayan (Second Division)
promulgated a Decision finding accused public officials guilty
beyond reasonable doubt as co-principals of the crime charged. The
dispositive portion reads:

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 5/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

“WHEREFORE, premises considered, the Court finds accused Elias Quibal

y Capati and Antonio Deniega y Ubas GUILTY beyond reasonable doubt as
co-principals for violation of Section 3, paragraph (e) of Republic Act No.
3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices
Act, in relation to Section 9 (a) thereof, and applying Act No. 4103, as
amended, otherwise known as the Indeterminate Sentence Law, the Court
imposes upon each accused the penalties of imprisonment ranging from SIX
(6) YEARS and ONE (1) MONTH to TEN (10) YEARS and ONE (1) DAY;
perpetual disqualification from public office; and, to indemnify the
Municipality of Palapag, Northern Samar, jointly and severally, the amount
of P348,345.35 without subsidiary imprisonment in case of insolvency.
“With costs.
“Considering that their co-accused Eduardo C. Guevarra has not yet been
brought within the jurisdiction of this Court up to this date, let this case be
archived as against him without prejudice to its revival in the event of his
arrest or voluntary submission
8
to the jurisdiction of this Court.
“SO ORDERED.”

________________

7 Penned by Associate Justice Narciso T. Atienza and concurred in by Associate

Justices Romeo M. Escareal and Augusto M. Amores; Annex “A,” Petition, Rollo,
pp. 25-46.
8 Ibid, at p. 46.

230

230 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)

The two (2) accused moved for a reconsideration. It was denied.

Hence this petition.
Petitioners contend that:

RESPONDENT SANDIGANBAYAN (SECOND DIVISION) ERRED IN

NOT UPHOLDING THE CONSTITUTIONAL RIGHT OF PETITIONERS
TO “DUE PROCESS” BY NOT ALLOWING RE-EXAMINATION AND
RE-AUDIT OF THE PROJECT WHICH HAS ALREADY BEEN
COMPLETED AND UTILIZED FOR PUBLIC USE.

II

RESPONDENT SANDIGANBAYAN (SECOND DIVISION) ERRED

IN NOT RESOLVING THAT THE GUILT OF THE PETITIONERS HAS
NOT BEEN PROVEN BEYOND REASONABLE DOUBT BECAUSE—

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 6/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

a) NO UNDUE INJURY HAS BEEN CAUSED TO THE

GOVERNMENT WITH THE FULL COMPLETION OF THE
PROJECT.
b) PETITIONERS DID NOT ACT WITH MANIFEST PARTIALITY,
EVIDENT BAD FAITH AND GROSS INEXCUSABLE
NEGLIGENCE.

We affirm petitioners’ conviction.

Petitioners were charged with a violation of Section 3 (e) of R.A.
3019, viz:

“SEC. 3. Corrupt practices by public officers.—In addition to acts or

omissions of public officers already penalized by existing law, the following
shall constitute corrupt practice of any public officer and are hereby
declared to be unlawful: x x x
“(e) Causing any undue injury to any party, including the
Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official, administrative or
judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and
employees of offices of government corporations charged with the grant of
licenses or permits or other concessions.”

231

VOL. 244, MAY 22, 1995 231

Quibal vs. Sandiganbayan (Second Division)

Violation of Section 3 (e) of R.A. 3019 requires proof of the

following facts, viz:

1. The accused is a public officer discharging administrative

or official functions or private persons charged in
conspiracy with them;
2. The public officer committed the prohibited act during the
performance of his official duty or in relation to his public
position;
3. The public officer acted with manifest partiality, evident
bad faith or gross, inexcusable negligence; and
4. His action caused undue injury to the Government or any
private party, or gave any party any unwarranted
9
benefit,
advantage or preference to such parties.

Petitioners insist that their guilt has not been proved beyond
reasonable doubt for they did not act with manifest partiality, evident
bad faith or gross, inexcusable negligence nor did they cause any

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 7/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

injury or damage to the municipal government for the construction

of the municipal market was eventually completed.
We reject these contentions.
The construction of the municipal market should have been
finished on March 7, 1988. At the time of the audit on August 31,
1988, however, only 36.24% of the construction of the market has
been completed. Yet, out of the contract price of P652,562.60,
petitioners already paid the contractor a total of P650,000.00. In so
doing, petitioners disregarded the provision in the contract that
payment should be based on the percentage of work
accomplishment. Moreover, the contract provided that in case of
delay in the completion of the project, the contractor shall be liable
for liquidated damages
10
at the rate of 1/10 of 1% of the contract price
per day of delay. Petitioners did not impose this provision against
the contractor. By their acts, petitioners clearly acted with manifest
partiality and evident bad faith relative to the construction of the
municipal market.

_______________

9 Villanueva v. Sandiganbayan, G.R. No. 105607, June 21, 1993, 223 SCRA 543;
Jacinto v. Sandiganbayan, G.R. No. 84571, October 2, 1989; Medija v.
Sandiganbayan, G.R. No. 102685, January 29, 1993, 218 SCRA 219; Ponce de Leon,
et al., v. Sandiganbayan, G.R. Nos. 89785-98, June 25, 1990, 186 SCRA 745.
10 Article II, Exhibit “C.”

232

232 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)

Petitioners’ acts and omissions are, to say the least, grossly

negligent. Gross negligence is the pursuit of a course of conduct
which would naturally and reasonably result in injury. It 11is an utter
disregard of or conscious indifference to consequences. In cases
involving public officials, there
12
is gross negligence when a breach of
duty is flagrant and palpable.
In the case at bench, petitioners’ acts and omissions demonstrated
an utter lack of care in enforcing the contract for the construction of
the public market and a reckless disregard of the COA rules and
regulations regarding disbursement of municipal funds. Petitioners
contend that they released P650,000.00 of the contract price to
enable the contractor to take advantage of the low cost of
construction materials prevailing at that time. Plainly, petitioners’
act violates the provision of the contract requiring that payment shall
be made on the basis of the percentage of completion of the project.
Moreover, as correctly pointed out by the Sandiganbayan:

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 8/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

x x x “The escalation of prices of construction materials which allegedly

prompted Quibal to pay the contractor prematurely is not a justification that
would absolve the accused public officers from criminal liability. The
parties could have included an escalation clause in the contract x x x.
Moreover, there is a law which authorizes the adjustment of contract price
(R.A. 5979, as amended by PD No. 454). x x x”

Petitioners also insist that no undue injury or damage was caused to

the municipal government considering the later completion of the
public market.
We cannot share this myopic view. The construction of the
municipal market was completed only at the end of December 1989
when it should have been finished by March 7, 1988. This
unnecessary delay of almost two (2) years caused considerable
monetary loss to the municipal government in the form of monthly
rentals. The least that petitioners should have done was to enforce
the penalty clause of the contract (providing for payment

________________

11 Marinduque Iron Mines Agents, Inc. v. Workmen’s Compensation Commission,

99 Phil., at p. 485, citing 38 Am. Jur., at p. 691.
12 Juan v. Arias, 72 SCRA, at p. 410.

233

VOL. 244, MAY 22, 1995 233

Quibal vs. Sandiganbayan (Second Division)

of liquidated damages in case of breach) when the contractor failed

to meet his deadline on March 7, 1988. Instead of doing so,
petitioners even made two (2) additional payments to the contractor
(on March 14 and April 22, 1988) in the total sum of P250,000.00.
Thus, it cannot be successfully argued that the acts and omissions of
petitioners did not cause damage or injury to the municipal
government.
Finally, to bolster their claim of denial of due process,
13
petitioners
cite the case of Tinga v. People of the Philippines. Petitioners’
reliance on the Tinga case is misplaced. In said case, we ruled that
Tinga was denied due process when the Commission on Audit
refused to conduct a re-evaluation of the account-abilities of Tinga.
The ruling was based on the Court’s finding that COA’s evaluation
of Tinga’s accountabilities was replete with errors, thus:

‘The Sandiganbayan Decision is replete with findings of errors in the audit

made of petitioner’s accountability . Thus, it said: (a) ‘We are not prepared
to repeat the same mistake as the audit team and prefer to credit Catalino Y.
Tinga for said sum of P12,654.80 deductible from his alleged shortage’ x x

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 9/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

x; (b) the claim of the defense that Tinga was a victim of robbery is fully
supported x x x resulting in a total loss of P10,708.14 x x x. The COA
auditing team ought to have credited the accused in this amount in his total
accountability for the accused never pocketed to his benefit this amount lost’
x x x; (c) ‘Court records indubitably attest to the fact that Laurencio R.
Masong, collection clerk of the Municipal Treasurer’s office of Bogo, Cebu,
failed to turn over to the accused collections in the total sum of P7,398.30 in
October 1976, for which reason said employee was charged and convicted
of the crime of Malversation of Public Funds x x x. Why then should the
COA auditors include the said sum in the accountability of Tinga? x x x; (d)
‘We find it relevant to observe that a careful examination of Exh. ‘L-1’
shows that the entry for withdrawal of voucher no. x x x has two circles
with a cross inside before and after the entry, indicating a cancellation or
mistake thereat. x x x Thus, the sum of P30,000 appears to be honestly
disputed, which also served as basis for the accused to insist on a review or
re-audit’ x x x; (e) ‘Such conclusion of the COA arose from many errors
committed during the audit examination x x x.’
xxx

_______________

13 No. L-57650, April 15, 1988, 160 SCRA 483.

234

234 SUPREME COURT REPORTS ANNOTATED

Quibal vs. Sandiganbayan (Second Division)

‘By the denial of the re-audit, petitioner was, as claimed by him, not
given the right to be fully heard before the charge was filed against him at a
time when the records were still available and past transactions still fresh in
the memory of all concerned. He was given the chance to defend himself
before the Sandiganbayan, yes, but as said Court itself observed ‘Tinga
continued to pursue his quest for a re-audit in his honest belief that he had
not malversed any government funds. In the process, many but not all
disbursement vouchers were located in the office of the Municipal Treasurer
of Bogo, Cebu, x x x.’ Perhaps, if he had been re-audited and his
accountability reviewed, a different result may have been produced.”

Petitioners also claim that considering the value of the unused

stockpile of construction materials and supplies, a re-audit would
prove that the payment they made was justified and that the actual
cost of the project at the time of the initial inspection is indeed
P650,000.00. We hold that the suggested re-audit would not
exonerate the petitioners. The re-audit cannot blur the fact that
undue damage has already been caused to the municipal government
in view of the delay in the construction of the municipal market and
the failure of the petitioners to enforce the penalty clause in the
construction contract.
www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 10/11
2/4/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 244

IN VIEW WHEREOF, the appealed Decision is hereby

AFFIRMED in toto. Costs against petitioners.
SO ORDERED.

Narvasa (C.J., Chairman), Regalado and Mendoza, JJ. ,

concur.

Judgment affirmed in toto.

Note.—The Ombudsman and the Presidential Commission on

Good Government have concurrent authority to investigate
violations of R.A. No. 3019. (Panlilio vs. Sandiganbayan, 210
SCRA 421 [1992])

———o0o———

235

© Copyright 2020 Central Book Supply, Inc. All rights reserved.

www.central.com.ph/sfsreader/session/000001700bfc1b665f7c32ed003600fb002c009e/t/?o=False 11/11